Large increases in private health insurance moved a step closer after the second or introductory stage of the Health (Amendment) Bill was passed in the Dáil yesterday.

Under the legislation patient costs will increase from €75 for an overnight hospital stay to €860, which Minister for Health James Reilly said was still well below the economic cost of those services.

Introducing the Bill, Dr Reilly defended the changes and said the Government believed they made sense. He said that until now private health insurers enjoyed a significant subsidy at the expense of the public hospital system.

Private patients in public beds paid €75 but private patients in a semi-private bed paid up to €1,000. “In both cases, the patient sees his or her consultant privately and pays the consultant’s private fees,” the Minister said.

“The cost of providing hospital services to private inpatients is at least €200 million more than the amount that public hospitals are currently allowed to charge.”

It was imperative to address the situation and the changes would bring in €125 million. The subsidy was the equivalent of running a significant-sized public hospital. “We cannot allow this situation to continue.”

Opposing the legislation, Fianna Fáil health spokesman Billy Kelleher said the Minister did not have a mandate to increase charges to fund the health service. He said it would have serious consequences for the health insurance industry.